The former Oppenheimer & Co. analyst, who recently started Meredith Whitney Advisory Group LLC, said the number of banks in the United States could be halved by the end of the current crisis.
"We could see [the current] 8,000 institutions go down by half or greater," she said.
Despite bankers´ complaints about the Troubled Asset Relief Program, Whitney said she does not expect to see many of the top banking companies repay their government capital anytime soon. They will need the money to rescue weak sisters.
"You´ll see so much deck-chair movement that much of the Tarp money will not be around to be repaid because many banks will be expected to absorb their neighbors," she said. "Big banks will be forced to absorb all the liquidity that is coming out of the market and what will be interesting is if some of the smaller banks that get private capital will start to consolidate."
Whitney also said the "super-siloed" manner in which regulators operate stands in the way of reform.
"One division knows what they´re doing and they´re speaking Mandarin, and another division knows what they´re doing but they´re all speaking Cantonese," she said.
Another problem, according to Whitney, is that the regulatory agencies, by their own admission, use old computer systems that barely work.
"If you´re leading regulatory reform, you have to have the technology as well, and they have not embraced technology," Whitney said. The U.S. regulatory structure still relies on a "pencil-ledger system."